Losing out on commercial advertising billions

By Macharia Kamau

Local firms are increasingly having their television adverts made outside the country, citing costs as well as the need by companies to keep competition in the dark about future marketing campaigns.

This has been to the detriment of the local film production industry and an apparent deterioration in the quality of advertisements by local firms.

Other than the confidentiality required in handling a company’s marketing campaigns before launch in a market that is becoming highly competitive across all sectors, marketers deem the costs associated with shooting TV commercials locally as extremely high.

Charges by local authorities and regulators to allow film production houses shoot on local locations are also being cited as key factors that see advertising agencies take jobs to other markets.

The export of jobs by the country is despite growing need to create employment for the jobless youthful population in Kenya.

The adverts shot elsewhere and meant for the Kenyan market are mostly done in India. South Africa is also among the destinations where Kenyan firms are exporting the TV commercial shooting jobs.

Chris Harrison chairman Young and Rubicam (Y&R) in Africa and Indian Ocean said his firm, and indeed other local advertising agencies, have been forced to ship out the shooting of commercials to other markets due to stingy marketers that allocate meagre resources to the making of TV commercials.

“We use both local and international production houses. In my view, we should be using only local resources. But here is the problem, there is a degree of ignorance among marketers about the level of investment required to shoot a really good TV commercial,” he said.

Quality of adverts
“A good commercial is well lit, well cast, has great music and graphics, and is directed by a creative person who knows how to bring a big idea to life.  Most clients in Kenya think that Sh5 million is too much for a TV commercial. In fact, in my experience, it is only half as much as should be invested.”

He added that failure to spend has resulted in the deterioration of quality of adverts, which in turn end up harming a brand as audiences associate the poorly shot advert with the product.

“Today, 70 per cent of the TV commercials are rubbish. They have what we call ‘low production values’. They look cheap. This means that the viewer dislikes them, and does not want to watch them repeatedly,” said Harrison.

“In an attempt to get better quality TV commercials for lower budgets, Ad Agencies are sometimes forced to go overseas to bigger markets like India where the resource pool is larger and the costs are more competitive.”

“If we want a stronger local TV production industry, we need to start with marketers believing in the true power of television as a medium, and investing accordingly. Ten years ago we made better TV commercials in Kenya than we do now.”

James Ngomeli chairman of the East African Chartered Marketers Forum noted that in addition to cost, one company keeping the competition in the dark as to what it might be planning in relation to its marketing campaigns was also a factor for the growing outsourcing of TV ads.

“Secrecy is a huge concern. When I am shooting a TV commercial, I do not want competitors to find out what I am doing. News of a product launch can get to the competitor early and one can easily use such information to play dirty and ruin the introduction of the product to the market,” he said.

He also noted that few production countries in the country may have monopolised the industry and more players might see costs coming down.
“As much as marketers may want to grow the local production industry, they are simply too expensive,” he said.

Ngomeli says currently, there are few production companies with the right equipment. “I feel that if there were more firms that do quality shooting, they could break the monopoly and we could see costs coming down.”

David Kinyanjui Managing Director Sanaa Zote Productions said the cost of filming equipment is high and in turn sees shooting of commercial becoming costly. This, he says, is in addition to a government bureaucracy that a producer has to go through to get clearance to do a shoot.

“Film equipment is expensive. There are cameras, for instance, that can go for as much as Sh800 000 for a day. That is just the camera, there have to be lighting, sound recording and mixing and one has to factor them when quoting to a client,” he said.

Regulatory hitch
He added that film producers have to go through a myriad of regulators, some of them require that you pay certain fees to get clearance to do a shoot.

These include the Communications Commission of Kenya (CCK), the Kenya Film Board, the Kenya Censorship Board, the Kenya Copyright Board and the local authorities, which in Nairobi’s case is the City Council of Nairobi.

“There are several regulators and they have been a hindrance,” said Kinyanjui.

Some local authorities append premium charges to their localities, for instance a day of shooting a film in areas like Malindi, Lamu and Narok can cost as much as Sh100 000. In 2009, the Ministry of Finance zero rated tax on cameras, lighting, sound and editing equipment. These were said to be taking a huge chunk of production budgets, thus discouraging investment in the film industry.